In New York, Taxi Apps Raise Objections From Competitors

New York City rules will soon permit yellow cab drivers to accept rides through smartphone apps.

Even people who've never been to New York can tell you how to hail one of the iconic yellow cabs there. You just raise an arm and flag one down.

But the city wants to change that. Following the lead of cities like San Francisco and Washington, D.C., New York wants to permit passengers to use smartphone apps to find a cab.

Since Mayor La Guardia established the New York's modern taxi system in 1937, there have been two big innovations in cab hailing. The whistle and the red light bulb on top of apartment building awnings.

"Light goes on. It's on top of the canopy. Cabs see it. They stop. Passenger goes in. Turn the light back off," says doorman John Vell. However, he says, cab drivers don't really pay attention to the light. "They don't acknowledge it at all."

And Vell doubts a smartphone app would work either. "It's faster just going out there and hailing a cab," he says.

But it may not be faster everywhere, and not all the time. New York taxis spend about 40 percent of their day empty looking for fares, especially in off-peak hours and outside Manhattan. New York Taxi and Limousine Commissioner David Yassky says apps are the latest innovation in hailing.

"I think it will help passengers find a cab a little bit faster. For drivers, every extra trip they do during that shift is a material amount of dollars for them," Yassky says.

But that's what's worrying other hired drivers, such as those for private car services. These livery cabs are more expensive and can only take passengers who call ahead first. Thousands of people already use apps with these cars.

Avik Kabessa is the head of Carmel car service, one of the largest in the city. He's joined other companies to sue to block yellow cab drivers from using apps.

"You just don't go and reshuffle the rights that have been in existence 40 years, just in the name of technology," Kabessa says.

Yellow taxis are a $2.5 billion industry here. The stakes are high all around. Every edge helps. So lawsuit or not, yellow cab drivers are signing up for apps in anticipation.

Yellow cab driver Abdul Munir is already testing out one of the apps, Hailo. The company has been recruiting drivers for about a year now at taxi stands and airports. They say they've already enlisted 5,000 of them.

Melissa Plaut is a taxi driver who is paid by Hailo to recruit other drivers to use the app. She shows me how it works in Munir's cab.

"So a driver would have their phone mounted in a cradle near the meter and a passenger would have [the app] ideally on their phone," Plaut says.

The app shows a map with a little blue figure holding a hand up hailing a cab. I can move the blue figure around and see nearby cabs. And with two taps on an iPad screen, I send the signal goes out that a cab is needed.

The driver's screen flashes a big green button and an address. To accept a fare, the driver hits the button. The passenger sees which cabbie is coming and from how far away.

With half a million passengers a day, it's a big business opportunity. And cabbies like ours, Abdul Munir, are ready.

"When this [starts], we rock and roll. That's it," he says.

The lawsuit goes to court at the end of the month. Unless they're blocked, yellow cab apps could show up a few days later. In addition to Hailo, other similar apps include Uber, GetTaxi, Flywheel and ZabKab. All are available for iPhone and Android users.